Since the European Union approved the new Directive (EU) 2025/516, MAM Solicitors has received numerous enquiries from foreign clients with properties in Spain.
Most share the same concern: how will this measure affect those who rent out their homes for short stays?
The change, which will come into force on 1 July 2028, will require VAT to be applied to all short-term tourist rentals, even when no additional services such as cleaning or catering are offered.
Although this tax change has caused some concern, the truth is that the measure seeks to unify tax criteria across the European Union and provide a clearer and fairer framework for both landlords and tenants.
At MAM Solicitors, we want to offer a simple and practical explanation of this new regulation so that foreign owners can anticipate the changes with peace of mind and legal certainty.
What is considered a short-term rental?
Firstly, it is important to clarify exactly what a short-term rental is and how it differs from a long-term seasonal rental.
The main difference between the two types of rental is as follows:
- Short-term rental: stays of up to 30 consecutive nights, usually linked to holiday tourism.
- Seasonal rental: contracts longer than one month, associated with work, academic or personal reasons, without the property becoming the tenant’s habitual residence.
According to the new regulations planned for 2028, only short-term rentals will be subject to VAT.
Why is the EU introducing this change?
Until now, many tourist rentals in Spain were exempt from VAT, provided they did not offer services typical of the hotel sector.
With Directive (EU) 2025/516, the European Union seeks to standardise the taxation of short-term rentals and avoid distortions of competition between the different member countries.
The main objective is to ensure greater fiscal transparency and a common framework that levels the playing field between private homes, digital platforms and professional accommodation providers.
What does this change mean for owners?
From July 2028, all owners who rent out their properties for short stays will be considered entrepreneurs or professionals for VAT purposes, which will entail new administrative obligations:
- Register with the tax authorities using form 036.
- Issue electronic invoices for each rental.
- Submit quarterly VAT returns and keep up-to-date records.
- Keep tax documentation for at least four years.
Although the tax rate has not yet been officially confirmed, it is expected to be 10%, the same as that applied to other tourist services.
At this point, we should mention that the Spanish Government is considering bringing this measure forward. However, we have not yet found any information indicating that this decision is 100% confirmed.
In the event of any changes, MAM Solicitors will keep you informed as soon as possible by updating the current information.
Digital platforms will also have new responsibilities.
Intermediary platforms, such as Airbnb or Booking, will have to adapt to the new legal framework. Their main obligations will include:
- Issuing electronic invoices in a structured format in accordance with European regulations.
- Acting as tax agents when the owner does not declare VAT or does not have a valid identification number.
- Transmitting information directly to the Tax Agency, eliminating the current monthly reports.
In this way, platforms will play a key role in VAT collection and control, simplifying part of the process for individual landlords
Although the measure will require adaptation, it also represents an opportunity to professionalise the management of tourist rentals and provide greater security for owners.
In addition, landlords will be able to deduct VAT paid on expenses related to their activity, such as renovations, equipment or maintenance of the property, which will partially offset the tax impact.
How should owners of short-stay tourist rentals prepare before 2028?
The Directive will not come into effect until July 2028, so owners have sufficient time to prepare.
At MAM Solicitors, we recommend:
- Reviewing your current tax situation and, if necessary, registering as a tourist landlord.
- Learn how to issue VAT invoices and keep basic accounts adapted to the new regime.
- Seek professional advice to plan the transition in advance and without legal risks.
With this measure, the European Union aims to build a fairer, more transparent and consistent system for all Member States. Although it will involve administrative adjustments, the result will be a more stable environment for owners and investors.
At MAM Solicitors, we assist foreign owners throughout the legal and tax process of their property investments in Spain.
Our team specialising in property law and international taxation can help you understand how to apply the new regulations and comply with all your obligations in a simple and secure manner.
